Correlation Between Menteng Heritage and Jasa Armada
Can any of the company-specific risk be diversified away by investing in both Menteng Heritage and Jasa Armada at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Menteng Heritage and Jasa Armada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Menteng Heritage Realty and Jasa Armada Indonesia, you can compare the effects of market volatilities on Menteng Heritage and Jasa Armada and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Menteng Heritage with a short position of Jasa Armada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Menteng Heritage and Jasa Armada.
Diversification Opportunities for Menteng Heritage and Jasa Armada
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Menteng and Jasa is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Menteng Heritage Realty and Jasa Armada Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasa Armada Indonesia and Menteng Heritage is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Menteng Heritage Realty are associated (or correlated) with Jasa Armada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasa Armada Indonesia has no effect on the direction of Menteng Heritage i.e., Menteng Heritage and Jasa Armada go up and down completely randomly.
Pair Corralation between Menteng Heritage and Jasa Armada
Assuming the 90 days trading horizon Menteng Heritage Realty is expected to generate 9.05 times more return on investment than Jasa Armada. However, Menteng Heritage is 9.05 times more volatile than Jasa Armada Indonesia. It trades about 0.37 of its potential returns per unit of risk. Jasa Armada Indonesia is currently generating about 0.0 per unit of risk. If you would invest 3,300 in Menteng Heritage Realty on August 27, 2024 and sell it today you would earn a total of 1,400 from holding Menteng Heritage Realty or generate 42.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Menteng Heritage Realty vs. Jasa Armada Indonesia
Performance |
| Timeline |
| Menteng Heritage Realty |
| Jasa Armada Indonesia |
Menteng Heritage and Jasa Armada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Menteng Heritage and Jasa Armada
The main advantage of trading using opposite Menteng Heritage and Jasa Armada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Menteng Heritage position performs unexpectedly, Jasa Armada can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jasa Armada will offset losses from the drop in Jasa Armada's long position.| Menteng Heritage vs. Jasa Armada Indonesia | Menteng Heritage vs. Cahayaputra Asa Keramik | Menteng Heritage vs. Campina Ice Cream |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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